Tories need a Budget bounce but can Hunt deliver?
7 hours agoAbout sharing
Cut tax! Spend less! Spend more! Tax more! Pay off the debt! Spend more on defence! More for me! Less for you!
Chancellors are never short of demands from the outside world or their colleagues on the inside for action.
After taking the reins during the Liz Truss disaster, nothing Jeremy Hunt says in his Budget on Wednesday is going to be as dramatic, or perhaps as important, as those first few decisions to ditch tens of billions of tax cuts that were promised on the never never.
But that doesn’t mean the clamour calling on him to do this or that is any less deafening. The pressure is huge, especially when the general election is months, not years away.
Be the first to sign up for the Off Air with Laura K newsletter, starting this week. Get Laura Kuenssberg’s expert insight and insider stories every week, emailed directly to you.
Talking to Jeremy Hunt’s Conservative colleagues, there is one thing they desire more than anything else.
Tax cuts.
That’s not just because the overall tax burden is at the highest it has been.
But because instinctively, ideologically, as one frustrated MP told me, “it’s a good Conservative principle”.
The MP told me the party has to “offer the idea at least that things are getting better and you are going to keep more of your own money”.
And another senior Conservative warns, unless there are “meaty tax cuts”, it just won’t be enough for the “moderate right” of the party who worry “we just don’t really look like a proper Conservative Party anymore”.
Is that what the public wants?
Polling gives different results depending how the question is asked (shock, horror).
But very often it suggests that many voters would rather money went to ease the strain on public services.
Or, as voters, we’re all greedy. One MP jokes: “I think no one should pay any tax and we should spend more too.”
On this week’s show are Chancellor Jeremy Hunt, Labour’sShadow Education Secretary Bridget Phillipson and Mariano Janin, father of Mia Janin, who took her own life after being bullied at schoolWatch live on BBC One and iPlayer from 09:00 GMT on SundayFollow latest updates in text and video on the BBC News website from 08:00
The Treasury does seem on track to cut National Insurance payments, although when Jeremy Hunt talks to us on Sunday morning, he won’t confirm that yet.
A National Insurance cut is seen by Number 10 and Number 11 – and this Budget is as much Rishi Sunak’s as it is Jeremy Hunt’s – as a quick way to reduce tax payments for millions, which is why Mr Hunt announced one in his autumn statement in November.
Whether it really has a political effect is a different question.
The move in the autumn didn’t budge the Tories’ dreadful opinion poll numbers, or change the mood on the backbenches for more than a few metaphorical minutes.
And that’s the other demand from many Conservatives – to give them something that might change the political atmosphere.
The question one poses is: “How do you make people feel better AND make Keir Starmer feel worse?”
The answer to that is expected to be stealing one of Labour’s own policies, by closing down the legal loopholes for “non-doms”, wealthy individuals who avoid tax on money made overseas.
Hypothetically, such a move would raise a few billion that can be spent on something else, like that National Insurance cut.
But politically, the aim would be to put Labour into a tricky corner.
If the Tories have already changed the policy the money Labour had earmarked for extra NHS staff and breakfast clubs in schools will no longer be available.
Labour will then need to come up with new ways of paying for those ideas at a time when public money is as tight as a drum.
If the Chancellor also extends the windfall tax on oil and gas companies as Labour plans to, then some of the money they have earmarked to spend on green jobs and green energy, if they win power, might be gobbled up too.
Although, the precise details of any policy, if and when it is announced on Wednesday, will be hugely important.
A Labour source said: “‘I think most punters at home will be asking themselves what is the point of the Conservatives now?
“This is the final Budget of their 14 years and four terms in office and what have they got left? Nothing more than stealing Labour’s plan.
“This isn’t a clever move on the chessboard. It is a sign of desperation from a chancellor who was sent out by Number 10 to say he was going to be the next Nigel Lawson [a tax-cutting Tory chancellor] only to find there is no money left.”
What is abundantly clear though, is that there isn’t going to be more money splashing around this week.
Treasury insiders are glum about the changes in the economy since the beginning of the year, that has made their cheque book smaller and smaller.
The last time Mr Hunt made a big set of announcements the picture in the medium term was already bleak enough, a series of what looks like eye-watering cuts in the years to come, which might be politically impossible.
As my colleague Faisal Islam, the BBC’s economics editor, has set out the picture this week is not likely to be any prettier.
So you can also expect the chancellor to talk on Wednesday about spending taxpayers’ cash better.
“Spend it better” isn’t exactly a grabby slogan, but it’s got more appeal than “sorry, I’m not raising tax any more and the economy is bleak so you’ll have to make do”.
One former Treasury minister worries that no politician on the government side is being straight about how fragile things really are, telling me: “If you were just thinking about the economics not the politics you would consolidate and get the debt down – you’d shore up the public finances, not use it for tax cuts, especially ones with dubious value.”
The national debt is, indeed, absolutely enormous.
The cost of the pandemic and the shock of the Ukraine war have both been incredible.
There are long-term pressures from an ageing population, the demands for defence in a more dangerous world, and the cost of going green, which politicians argue over, but, in this country, just about all agree has to happen.
And in the short term there are two more huge costs coming that the government will have to settle.
The cost of compensation for the Post Office Horizon scandal, which sources suggest could reach £3bn.
And payouts to the victims of the infected blood scandal, which could tip £15bn.
There is zero guarantee the country’s books are going to look any healthier in the autumn, when the general election is expected.
Is there still a tiny chance the prime minister will wake up in a fortnight and think, well, it’s not going to get any better, let’s crack on with the election right now?
Never say never.
But this Budget is not likely to give Rishi Sunak a bounce into a ballot in late spring.
We’ll have to wait until Wednesday to see if it’s going to give him and Jeremy Hunt any bounce at all.
What questions would you like to ask Chancellor Jeremy Hunt and Labour’s Shadow Education Secretary Bridget Phillipson this Sunday?
In some cases your question will be published, displaying your name, age and location as you provide it, unless you state otherwise. Your contact details will never be published. Please ensure you have read our terms & conditions and privacy policy.
Use this form to ask your question:
If you are reading this page and can’t see the form you will need to visit the mobile version of the BBC website to submit your question or send them via email to [email protected]. Please include your name, age and location with any question you send in.
Related Topics
4 days ago19 February
For more details: Read More
